Page 31 - FINANCE PART 2 - 10. Mergers & Acquisitions
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MERGERS & ACQUISITIONS
Due diligence investigations
• A due diligence investigation refers to a detailed
examination of the target company prior to the merger or
acquisition. The aim of such investigations is to
verify/audit, amongst others, the financial, legal and
operational information of the target company so as to
ensure that the acquiring company makes an informed
decision.
• These procedures are usually carried out by a special team
who have experience in this field and consist of employees
of the acquiring company and some experts if necessary.
The results of such procedures could lead to a change in
the terms of the proposed merger or acquisition or even a
cancellation of the transaction (Correia, Flynn, Uliana &
Wormald 2011).
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